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The case for brand-building during a downturn

The Drum 21 May 2020 11:30
The case for brand-building during a downturn

With the world united in turmoil, the value of marketing and brand building has been questioned as budgets have suddenly tightened and businesses work hard to survive. Here, David Buttle, global commercial marketing director for the Financial Times, argues that companies must continue to invest in their brand and look to the future while also dealing with the immediate present.

Working in partnership with the IPA, the Financial Times recently published The Board-Brand Rift, a study into the organisational forces driving the shift in marketing expenditure from long-term brand-building activity (roughly 60% of spend in 2000) to short-term activation campaigns today (over 50% today). The findings of this study provide some guidance on how marketers can make the case for brand investment during the purse-tightening that many businesses are undertaking as the economic fallout from the coronavirus is felt.

The dynamics of the advertising market add weight to the case to invest. Demand for brand-building media (indeed, all media) has dropped dramatically as campaigns are paused; prices have fallen commensurately. Take TV, arguably still the ultimate brand-building platform; the latest IAB survey reported that marketers plan to reduce their spend by 41% in March and April. The picture is the same across digital, print, radio and online video.

But most businesses aren’t investing in their brand at this time. The data tell us that.

The findings of our research suggest that beneath this growing short-termism sits a deficiency of reliable brand-to-revenue metrics (when compared with performance channels), a prevailing focus – from investors and consequently management – on short-term commercial performance (not helped by quarterly financial reporting cycles in the US) and a lack of confidence in brand-building capabilities and skills; a perception shared by marketing leadership and across the boardroom.

So how can we make the case for brand investment in this environment? Here are three tips from our study.

Assess the brand metrics your business is using, and where possible, link these to measures of commercial contribution. Brands deliver against a range of direct commercial performance indicators, from reducing price sensitivity, improving margins, to acting as a guarantor of future sales through customer loyalty. Too often though, brands are discussed only in terms of narrow (and from the perspective of the chief financial officer, ‘woolly’) marketing metrics such as awareness, salience or consideration. Change that.

For most organisations the current crisis is financial in nature; it relates principally to cold, hard cash. Our research tells us that marketing – and particularly brand-building – is perceived to exist in a non-financial realm. If we can correct that misconception, and bridge that gap, we’ll be able to make a more effective case for marketing, and particularly brand, investment and our organisations will come out of this crisis stronger.

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David ButtleFinancial TimesIPA
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